LightCounting: Don't give up on optical components!

Sales of optical components and modules are projected to ramp up a modest 10% in 2012, after increasing by 17% and 36% in 2011 and 2010, respectively, according to the latest forecast from specialist consultancy firm LightCounting Inc. But although the market contraction continues, the consultancy sees important opportunities for certain market sectors.

Among the major market segments, Ethernet, DWDM, and FTTx markets will lead the growth in 2012 and beyond. Emerging market opportunities for active optical cables (AOCs) and embedded optical modules (EOMs) offer additional streams of revenues for component suppliers in 2012—2016.

The detailed market forecast is available in a new report titled, “Optical Communications Market Forecast: Do Not Give Up on the Optical Networking Industry.” The report also offers a detailed forecast for optical components and modules, including historical data from 2008 to 2011, and a detailed market forecast through 2016 for optical components and modules used in Ethernet, Fibre Channel, SONET/SDH, CWDM/DWDM, wireless infrastructure, FTTx, and high-performance computing (HPC) applications.

According to the latest data collected by LightCounting, sales of FTTx modules grew the fastest in 2011, increasing 70% for the year. The sharp increase in shipments of PON transceivers for FTTH deployments in China, directly supported by the government, accounted for most of this growth. Many privately held Chinese suppliers of PON components and modules benefited from this opportunity in 2011 and are expecting a 20%–30% increase in 2012 sales.

“Very strong growth in the FTTx market is directly related to investment decisions made by the Chinese government, so this market is difficult to forecast. An economic slowdown may provide another boost to this market via stimulus funding offered by the government,” commented Vladimir Kozlov, founder and CEO of LightCounting.

“Demand for optics in the global telecom networks and datacenters is correlated with growth in Internet traffic and is more predictable. However, these markets are prone to fluctuations. Apart from general economic sentiment impacting investments into networking infrastructure, a small 5%–7% increase in projected growth of Internet traffic could lead to 40%–50% jump in demand for optical components and modules.”

The forecast report offers a steady-state scenario for the market growth and discusses potential impacts of an economic slowdown or change in the Internet traffic growth rate. Even in the conservative steady-state scenario, sales of Ethernet and DWDM components and modules are expected to increase at around 15% CAGR in 2012–2016. Growth in other major market segments will be below 10% CAGR in the same period, but emerging markets for AOCs and EOMs are well positioned to grow much faster.

For more information on optical transceivers and suppliers, visit the Lightwave Buyer's Guide.